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On April 4, 2012, the Supreme Court of British Columbia ruled that the City of Salmon Arm owed no constitutional duty to consult the Neskonlith Indian Band (Band) in respect of a development permit the City had issued. In so doing, the Court brought a measure of certainty to the circumstances in which a constitutional duty to consult First Nations can arise.

Since 2004 and the landmark decision of the Supreme Court of Canada in Haida Nation v. British Columbia (Minister of Forests) (Haida Nation),1it has been clear that the Crown owes a constitutional duty to consult First Nations wherever the Crown contemplates a decision that may have an adverse impact on claimed Aboriginal rights or title. The duty to consult is grounded in the "honour of the Crown", which requires that, while the process of negotiating claims continues, the Crown must consult and, where appropriate, accommodate Aboriginal interests to ensure that those interests are not prejudiced pending resolution of the claims.

In the Neskonlith case, the Court considered whether such a duty can also rest with a municipality, as opposed to the federal or provincial Crown. Although other B.C. decisions have considered the question to varying degrees,2 the Neskonlith case addresses the issue directly.

The facts were as follows. The Band brought a petition seeking to quash an environmentally hazardous area development permit issued by the City of Salmon Arm to Salmon Arm Shopping Centres Limited, a developer seeking to construct a shopping centre on land it owned in fee simple. The permit was issued pursuant to authority granted in Part 26 of the British Columbia Local Government Act. The permit was required because the development is located in an area designated by the City as an Environmentally Hazardous Development Permit Area due to the fact that it is in a floodplain.

The Band took the position that the City owed the Band a constitutional duty to consult with it before issuing the development permit, and that the City had failed to do so. The Band argued that Part 26 of the Local Government Act effectively delegated land use decisions to municipalities without oversight from the province, and that such delegated authority must be exercised in a manner consistent with the honour of the Crown. If it were otherwise, the Band argued, the province may be able to "shirk" its constitutional responsibilities. The Band drew an analogy to Canadian Charter of Rights and Freedoms (Charter) jurisprudence, arguing that the constitutional duty to consult should be held to apply to municipalities in the same way that municipalities are subject to the Charter.

Both the City and the developer argued that the City could not, as a matter of law, owe a constitutional duty to consult. The developer also raised alternative arguments, that, on the particular facts of the case, a duty to consult could not have been triggered, and even if it was, the duty had been satisfied.

In a clear and succinct decision, Mr. Justice Leask dismissed the Band’s petition, holding that the City did not owe a constitutional duty to consult the Band. The Court confirmed the principle articulated in Haida Nation that the honour of the Crown is non-delegable, and rejected the Band’s argument that the duty to consult automatically vests with any entity that is empowered to make decisions that may affect Aboriginal rights. The Court was also unpersuaded by the Band’s analogy to Charter jurisprudence, noting the fundamental differences between rights protected by the Charter and Aboriginal rights protected by s. 35 of the Constitution Act.

The Court did leave open the possibility that municipalities could, in certain circumstances, be subject to the duty to consult. Relying on the Supreme Court of Canada’s decision in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council,3 in which the Supreme Court described how consultation powers could be delegated to an administrative tribunal, Mr. Justice Leask noted that aspects of the duty to consult could, in theory, be delegated to municipalities, but in order for the province to do so, the power must be expressly or impliedly conferred by statute. In the Neskonlith case, the Band did not argue that the Local Government Act contained such an express or implied delegation of consultation obligations.

It is currently unknown whether the Band will appeal the decision. As it stands, the decision reiterates the principles espoused in Haida Nation and serves to further define the boundaries of the constitutional duty to consult and when such a duty may arise. It should also provide municipalities and developers with some level of comfort in respect of future development in the province, at least in the near term.